While overall sale volumes have softened nationally in recent months, Florida has experienced an increase in activity. The chart below details how, in the last 4 months of 2008, the volume of closed transactions increased up to 27% compared to 2007.

# of closed sales 2007 # of closed sales 2008 % change
January 9360 6737 -28%
February 11132 8311 -25%
March 12356 9330 -24%
April 12358 11200 -9%
May 12882 12175 -5%
June 12276 11700 -5%
July 11498 11492 0%
August 11282 10847 -4%
September 8725 10817 24%
October 9118 10443 15%
November 8269 8571 4%
December 8712 11053 27%

Source: Florida Association of Realtors

There are a few factors that are responsible for the jump in volume. If Miami were a small town in Middle America home prices could still be considered overpriced. However as Miami is transitioning into a major global cosmopolitan city, then its prices are to be compared to markets like Honolulu and Los Angeles. Prices are then extremely attractive.

Factors that are driving the Miami market include:

• U.S. Baby Boomers - Over the next 20 years, a steady flow of wealthy retirees will be flowing into sunny warm weather and some will be willing to pay a premium for ocean views.
• Foreign Baby Boomers - The financially successful baby boomers from abroad will demand a piece of the American Dream. It is a status symbol. Many are making a move while the U.S. dollar is weak.
• Increase in Bulk Purchases - For many months several vulture funds waited on the sidelines. We know first-hand that bulk purchases are happening, which will reduce the inventory of available homes and condos.
• Nouveau Rich - Russia and Kazakhstan are creating newly minted oil barons. Entrepreneurs are springing up en masse in Eastern European countries. A property in Miami and London or New York is the ultimate conspicuous consumption.
• Strong Rental Market - Many residents in the state are not qualifying for loans or might not have a 30% down payment. Therefore, most of them are renting property. In most cases we have successfully leased out clients' rentals in the first week they would come on the market.
• Improving Insurance - Experts foresee a decrease in insurance rates in the coming years as a result of the large profits insurance companies received in the past few years. According to estimates made by Lawrence Yun (Chief Economist, NAR), high insurance premiums knocked about $30,000 off housing values in Miami.
• Improvement in Property Tax - Legislators have begun to take measures to reduce property taxes across the board.
• Low interest rates - Rates are low at 5.5%. Our experience in the last few months tells us that banks are lending to qualified buyers.

I am a Realtor representing buyers and sellers in Miami/Miami Beach. For more information please visit me at www.christiankawas.com

Real Estate Outlook for 2009

Since we are approaching the end of the year, a hot topic in the national and local media has been; what will happen to real estate prices in 2009? I have heard many different points of views most of them very valid and very reasonable from both sides of the issue. In this blog I get to give you my two cents of where I predict things are heading.

Let me start by saying that I am an expert in the Miami/Miami Beach real estate market and have just basic knowledge of what is happening in other markets, my opinions are limited to what I see day to day in the Miami markets. In the last 3 months sale volume has increased in our office as well as in the area due to the fact that people are starting to believe that property is again priced competitively and in the long term they would benefit from investing today in the market. Also the rental markets in some areas are strong. The key word here is "area". The market even within Miami/Miami Beach varies from neighborhood to neighborhood and even building to building. There are buildings and areas that might better suit what you are trying to accomplish with your purchase of real estate. Some buildings might be great to buy a unit and rent out, another buildings might be better to use as a second home. A realtor (like myself) should be able to guide you throught this, and suggest different buildings that meet your goals.

I believe prices in Miami will be stable in 2009 and we will see a reduction in inventory in most buildings. I believe that 2009 is the year to buy real estate. I the sooner the better as long as you negotiate a discount with either the bank or developer. I heard Jim Cramer say the other day about investing in general; You can't wait for the turn in the market, because you will be too late". I think he is right I think 2009 is the year to identify a nice property negotiate a great deal and buy it! You will be glad you did in 4-6 years time.

If you have any questions about buying or selling property in Miami/Miami Beach please contact Christian Kawas at ckawas@ellimanflorida.com or at 561 702 2969

State of the Rental Market in Miami/Miami Beach

Over the last 2-3 months my sales volume has increase considerably mainly because people are starting to see that prices in Miami/Miami Beach have come down so much that it is again a smart option to buy real estate as an investment and either rent it out all the time or use it a few times a year and rent it out when not in use.

When my clients ask me how hard is it going to be to rent their units? I am happy to answer: not hard at all! Most of the units that I have listed for my clients have rented within the first month and many of those within the first 2 weeks. The only disclaimer here is that the property has to be listed at a reasonable price. If the price is unreasonable it will sit on the market. Amazingly enough I listed a property for rent this year at an unreasonable rate (as per my clients wishes, not mine J) and to my surprise we had many people wanting to see the property. We did not have any takers until we reduced the price to actual market value. But the story should give you an idea of how great the current rental market is.

Why is the rental market so hot?

Over the last few years when real estate was booming, many rental communities were condo-converted and sold individually. This led to a huge chunk of the rental market inventory to be eaten up in a short period of time.

Currently many people want to buy a home but are not qualifying for loans (as I imagine you’ve heard a million times in the last week loans has become more difficult to qualify for) therefore they are postponing their purchase for a couple of years (creating pent up demand that will help real estate values bounce back).

The short term rental market in Miami has officially entered season. Our season last from November to the end of April; when we are enjoying amazing weather and the rest of the world is freezing (by no means do I intend to annoy anybody that is currently freezing while I sit out on South Beach writing this blog, hahaha). On a more serious note during this season tens of thousands of people come from Canada, NY and Europe to spend time in the Miami area, or to attend events such as Art Basel, the Auto show, the Food and Wine festival, etc. Many of these visitors stay for 2, 3 or 4 months and look for short term accommodations and pay a premium for it.

Short Term Renting VS Long Term Renting

Many of my clients want to know whether they are better off renting the property short (less than 6 months) or long term (more than 6 months). In most cases it is a difficult question to answer. But if a buyer wants to use the property himself once or twice he/she should not rent it long term. Long term rents are great for those who are buying the property purely as a financial decision.

If you have any questions about buying a property to rent or leasing a property you already own please contact Christian Kawas at 1 561 702 2969 or via email at ckawas@ellimanflorida.com . www.christiankawas.com

Mei,Miami Beach-Oceanfront Zen Luxury at a Discount!

Last week a colleague of mine dragged me to preview an oceanfront building called MEI, I was hesitant as my time was limited with appointments that day. But after a few attempts I was convinced to go take a quick look as he suggested I preview it for one of our clients.
As we drove up to the valet attendant in the building I was pleasantly amazed with the arquitecture and the look of the building. As we walked into the lobby my jaw dropped, this place was unbelievable! As a former disbeliever on the effects of zen on interior design, I was now a believer! The interior design was done by the designers of the Mandarin Oriental hotels. The lobby features a "Tea Lounge", a "Zen library" and other amazing features that make you get into a very relaxed and peaceful state of mind.

The building also features 5 star amenities amongst some a fully equipped gym, spa, an amazing pool area, and concierge service. Every unit in this building has amazing views. Most unit have ocean views, the few that have limited ocean views have great views of the city, downtown Miami, and La Gorce golf course.
But I wouldn't be writing about this building if I didn't think it was a great value for my clients. I believe this building is an amazing opportunity as the price per square foot is the lowest by far for new construction with these luxuries and views. There are buildings similar in design to Mei that are currently selling for 3 times the price per square foot in the Miami Beach. The reason that this is such a great deal is because this is a developer sell out. They are slashing their prices to get rid of the remaining inventory. Currently you can get a 2 bedroom unit in the building for $699K with ocean views, before I forget to mention these units come with custom Thermador appliances and amazing bathroom fixtures such as a Toto toilet,that opens the lid automatically as you approach it!

I encourage you to give me a call and I'll take you to see this building next time you are in Miami. I loved it so much that I ended up missing my lunch and was barely on time for my 2 PM appointment.

If you have any questions about ownership or investment opportunities at MEI please contact Christian at 1 561 702 2969 or via email at ckawas@ellimanflorida.com or visit http://www.christiankawas.com/

Foreclosure, Short Sales, developer fire sales and bargain hunting in Miami

First let me start by defining what a short sale, foreclosure, or buying from a motivated developer entails and how these might provide a good investment opportunity for you. The opinions that you see in the upcoming paragraphs are based on my experiences in the Miami/Miami Beach real estate market.

Short Sale

A short sale occurs when a seller owes more to the bank than a buyer is willing to pay in the current market. In this case the bank approves the sale of the real estate at a loss and the bank absorbs the loss and the seller is freed from the debt to the house. In these instances you the buyer will be dealing with the seller/owner directly (since the bank has not foreclosed on the property yet) and you will agree on a price as you would for any other sale. The only caveat is that after the seller and buyer have agreed on the price the contract is then submitted to the bank for approval. The approval is a VERY lengthy process. Different banks have different guidelines and will take a certain percentage of what is owed to them. Generally short sales are going to sell for or just under the appraised value.

Foreclosure

The real estate property in a bank foreclosure is now owned by the bank. The bank then markets the sale of the property through a real estate broker. Currently there are a great number of foreclosed opportunities in the market place, all kinds of units, basic, luxury, beachfront, etc. Generally banks will want to get the real estate out of their books ASAP since every month they own the real estate they have to pay for the expenses and taxes. Purchasing a foreclosure can be done in as quick as 15 days and you will certainly be getting something for under appraised value.

Developer Fire Sale

In Miami the cranes are no longer present in our skyline, which is a sign that developers are fleeing the market at least for the next 3 years. The developments that have been completed are finishing to sell their inventory. In many cases people put down 20% down payments on pre-construction units and they are no longer able to close on their unit, defaulting on their deposit. Buyers that are ready to close can absorb the defaulted deposits and still negotiate the price on the unit further. In most cases developers are selling at a better price per square foot that a foreclosed property. The biggest advantage is that you won't have to deal with cleaning the unit and having to get new appliances or having to paint the apartment, developer units are brand new!

Your comments are welcome! If you have any questions for me feel free to contact me via my cell phone at 1 561 702 2969 or via email @ ckawas@ellimanflorida.com. www.christiankawas.com

Christian Kawas
Realtor Associate
Douglas Elliman Florida